Further to last year’s “getting on with the job” theme, Treasurer Tim Pallas handed down his 2018-19 budget speech on 1 May 2018 focusing on “getting things done”.

Headline items from the Budget are:

  • an operating surplus of $1.4 billion in 2018-19 and surpluses averaging $2.5 billion a year over the forward estimates to 2021-22
  • total revenue of $69.5 billion, including total tax revenue of $24.1 billion in 2018-19
  • net debt of $19.6 billion in 2017-18, increasing over the forward estimates to 31.4 billion in 2021-22
  • 3 per cent expected economic growth in 2017-18, slightly decreasing to 2.75 per cent over the forward estimates to 2021-22
  • retention of the triple-A fiscal rating
  • unemployment of 5.75 per cent

With the forthcoming State election in November 2018, the government has continued the spending spree on roads and public transport, health, education, job skills and the justice system. Overall, this spending, which is not balanced with the introduction of any new taxes or duties – indeed there is a reduction in payroll taxes for regional Victoria – will likely be well received by businesses.

However, this spending spree is heavily reliant on continuing record revenue from land transfer duty and land tax, as well as the State’s share of the GST. It also relies on revenue from the sale of Victoria’s share in Snowy Hydro Limited to the Commonwealth, proceeds of which will be used to finance regional infrastructure.